Brexit Bulletin: Parliament Strikes Again

(Bloomberg) -- Today in Brexit: The U.K. Parliament backs a measure making it harder to force through a no-deal Brexit, setting up a likely showdown with leadership favorite Boris Johnson.

What’s Happening?

Britain’s lawmakers have once again flexed their muscles in the ongoing battle for the soul of Brexit, delivering a sharp warning to the country’s next prime minister that they won’t be able to pursue a no-deal split without a fight.

After another night of late drama in the House of Commons, MPs passed by a single vote a measure aimed at stopping the U.K.’s future leader from taking the country out of the European Union without Parliament around. They voted that the body should have to meet between September and December, ruling out a shutdown that could allow a prime minister to force through a no-deal Brexit on Oct. 31.

Just minutes after the vote, leadership favorite Boris Johnson refused to rule out suspending Parliament if it's the only way to deliver his “do or die” promise of leaving the EU by the October deadline. That stance sets up another potential crisis in British politics in the weeks and months ahead. Speaking in a head-to-head televised debate with Johnson, his rival Jeremy Hunt rejected the shutdown idea.

For both, the tricky task of delivering Brexit was also made harder Tuesday when the opposition Labour Party officially announced its support for a second Brexit referendum on any Tory Brexit deal. Lacking both a majority in the Commons and the guaranteed support of all Tories and some allies, a Conservative prime minister needs Labour votes to get an agreement over the line. With Labour’s latest shift in position, that looks increasingly unlikely. 

Where does Brexit go from here? With Parliament deadlocked and Johnson and Hunt both rejecting other possible routes to a resolution, such as a general election or a fresh referendum, something has to give. Parliament may soon have to choose between a no-deal exit or bringing down the government.

Today’s Must-Reads

• U.K. Brexit Secretary Stephen Barclay talked tough on Ireland at meetings in Brussels Tuesday, pushing for concessions and saying the country has more to lose than the U.K. if there’s a no-deal split, Bloomberg’s Ian Wishart writes.
• Jeremy Hunt came out on top in the TV debate with Johnson, but neither candidate landed a knockout blow, The Guardian’s Rowena Mason writes.
• Tired of the Brexit deadlock and criticism from their political masters, Britain's civil servants are leaving in droves, Alice Thomson writes in the Times.

Brexit in Brief

On The Markets| The pound hit a two-year low against the dollar Tuesday, after disappointing retail sales and suggestions the U.K. economy could be set for its worst quarter since 2012.

How to Avoid Border Checks? | The Irish government continues to be vague about how it could avoid border checks with Northern Ireland if there’s a no-deal split. Ireland’s Foreign Minister Simon Coveney told reporters in Dublin Tuesday that Theresa May's Brexit accord is the “only viable solution on the table” to avoid border controls.

Trump Spat | Whoever becomes Britain’s prime minister won’t just have Brexit to handle: There’s also a major diplomatic row to defuse with the U.S., its most important foreign ally. Donald Trump escalated the spat over a series of leaked diplomatic cables critical of the President by calling U.K. ambassador Kim Darroch a “stupid guy” and “pompous fool.”

Break-Up Risk | There is a “real risk” of the break-up of the U.K. in the event of a no-deal Brexit, Theresa May's deputy, David Lidington, told the Cabinet on Tuesday, according to the Financial Times.

Deal Falls Through | Australian infrastructure bank Macquarie has pulled out of a £2.5 billion deal to buy one of Britain's biggest care home chains, blaming the uncertainty around Brexit, the Financial Times reports, citing an unidentified source.

Parlez-Vous Anglais? | Foreign language learning is on the decline in Britain, and Brexit is seen as a factor, Michael Skapinker writes in the FT.

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To contact the editor responsible for this story: Anne Swardson at aswardson@bloomberg.net, Leila Taha

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